The age of pre-paid apps is over

The entire Apple community has spent much of the last several years coming to terms with the post-App Store software market, where people won't pay even a few dollars for a great app, but will pay hundreds of dollars to get a higher score on Candy Crush or a better looking Springfield on Tapped Out. But it's not just games, as Marco Arment points out:

This is the real reason why Apple doesn't care about upgrade pricing: there's no demand from customers. The market has shown that free apps will be downloaded at least an order of magnitude more than paid-up-front apps, and smart use of in-app purchase in a free app is likely to make more money. Over time, this trend has only become stronger and more clear.

Paid-up-front iOS apps had a great run, but it's over. Time to make other plans.

It's not the App Store some of us want, but it's the App Store most of us have decided to support and reward. Whether we look back at the simpler time when we paid a fair price for a great app and incrementally upgraded from there as the dark ages, or as the good old days, remains to be seen.

As does the types of apps this in-app future, fully realized, will bring.

Reader comments

The age of pre-paid apps is over

Apple could have avoided much of that by giving users the option of trying apps before buying, or offering the option of getting a refund, like Google does. We've all bought apps which were disapointing to say the least.

Agreed 100%. This wouldn't work for all apps - some apps deliver all their usefulness in a very short timespan - but it would be a HUGE win-win in all other cases. Customers love to see and touch before they buy. Developers wouldn't have to go through hoops to advertise / add IAPS / and other complications of Freemium implementations. Paid app business model could thrive again. Paid upgrades are a whole new minefield, but free trial period has very few drawbacks and a huge upside. Please Apple, please!!!

Agreed. I've bought several apps that turned out to be completely useless. Google has many more free options or "lite" options to allow users to try before they buy. I don't care how stringent Apple is compared to Google...it does nothing to ensure the user to be happy with paying $1.99 for an app that doesn't do what it claims.

I have no problem paying for an app but will not pay to win. I'm playing PvZ2 right now and if I get to a point where I have to pay to win then I'll just uninstall it. Would rather of paid $5-$10 upfront for it.

That's usually the first thing I check before deciding, "Yes, I will download this app".
I'd rather pay up front than have to deal with extra menus full of IAP's.
... Of course I have found some good "free app of the day" deals in the last year.

So, basically cheapskates with addictive personalities dominate the population. That explains a lot.

I will not even download a freemium app. I don't care how good it looks or it's supposed to be. I won't support this model ever. I will pay $5 for a good game or app, but I'm apparently in the minority. The only "free" apps I download are major ones that subsidize through ads such as Pocket, Pulse, etc.

No developer will ever get a dime out of me for an IAP and I will stay stubborn about that to my grave. This model needs to die an excruciating death. I just wish more people were like me. The app landscape is becoming a very sorry one to the point where I'm weary about even downloading free apps that I don't think have IAPs.

I generally agree with you. I will not pay a penny to "crush canndy". I have, however, on occasion supported the freemium model. For example, I find penultimate very useful and had no problem purchasing additional paper styles that made it better for me.

Good point. I should clarify my position. I have paid to remove ads (I hate them) and to unlock features that make the app better (Titanium Backup for android comes to mind) as well as other templates within some apps.

What I will never pay for are game IAPs or IAPs that you have to buy just to make the app useful. I'd rather pay up front and be done with it.

Perfect first sentence. I was trying to think of a nice way to say the world is dominated by dumb arses but you just nailed it. That said I'm not against IAP's. I would miss out on half the fun if I were that hard lined.

Sitting in your side of the fence.....I prefer to buy the full version of an app up front & have been doing that ever since I started with smartphones (hell, I even used to do it in the early Android Market days too!!). I don't play games (Tetris is the only 1 I have/need installed), so that doesn't really apply to me, but if I did I know 100% I would have no problem paying a premium/higher price up front instead of these b.s. IAPs devs are going to now bc people are ridiculous (the reasoning & habits IMHO) with their mobile app/game purchases.

IAP purchases are just annoying when done wrong.. in games like temple run and subway surfer it's done right as IAP does not come in the way of enjoying the game or isn't forces on you.. take the new asphalt 8, it is appalling how much they charge for IAP example to buy some super cars it costs like £70 lol that's more than gta 5 and it's pretty impossible to actually get far in the game as Imo the game is rigged so you dont win with a slow car and this game isn't even free to download.. IAP has ruined gaming Imo, devs are just taking advantage and instead of making a good game they now create games around IAP.. imo they should have a one off iap purchase that lets you have the full game.

If every app were free and I had to pay to unlock ad-free status or....syncing options (I don't know, just making something up) I'm cool with that. I mean, I'd rather pay for that up front for an app I really want but at the end of the day if it is cost neutral to me I don't really care. I like simple things and IAPs can be decidedly not simple for devs to price fairly or consumers to wade through - but so it goes.

The Timer app from App Cubby is a good app with IAP. It worked well on it's own for free, showed me some adds, and limited me to a basic design. I wanted a bit more out of it so I paid to unlock a different design and got no ads in the process (I believe - I don't remember the breakdown exactly). The in app purchase was fairly priced and was around what I would have paid for up front for the app anyway.

I don't like the model very much but it can work. We as educated consumers have to be careful about who we reward with our money so that we can encourage high quality apps for our needs.

I never paid for any in-app purchases. And I will never do. The same reason I decided to play World of Warcraft on Mac and not any other game. I don't like the Free to play idea then end up paying hundreds when I can pay few bucks for a full featured service. That's why I was so sad when I knew WhatsApp went free, although my number has lifetime service it is still annoying, what if I got a new cell phone number? moved to a different country. I will be stuck paying 0.99$ per year. I know that's not much, but still I hate this idea, but I am thankful to BlackBerry that BBM is now there and I will no longer need to waste a cent on WhatsApp.

The question is how to adjust your business model for a freemium / IAP. Let's say if you create productivity apps, in apps are probably not the best way of making money and delivering good user experience. Subscriptions might be big.

No offense but Whaaaaaa! Where's my tiny violin. MOST people do not want to pay for apps. You quoted it yourself "there’s no demand from customers." Most people do not have issues. They simply don't buy in app purchases and/or don't buy an app that gives them little value for their money. A very easy solution.

not only do I never make in-app purchases but if an app pushes it too much, such as tetris blitz, I completely stop using it.
At the end of the day its a phone and I don't want to be bombarded with purchase requests every second.

I gladly pay for apps that perform as stated, and as per my needs. Free garbage apps, apps that clutter my screen with ad bombardments, ect, are not downloaded, or are deleted.

I've also reached the point, a year or so ago, where I no longer want to deal with the huge number of apps. So I'll gladly pay for great apps that perform as needed, and preferably, they can serve more than one over-simplified task. The net result is fewer apps, better functionality, less frustration, get more done...with less...sooner.

I buy an app that looks cool or useful. I don't call what "model" they fit--make a good app, I'll buy it (it's only a few bucks, for Pete's sake!), the rest is superfluous except to app geeks who post on blogs. ;-)

We have two versions of our popular "MailShot" app on the App Store. One is the full-price app ("MailShot Pro") and the other is free to download, with a single IAP to remove size limitations on the group. One is typically the first result when you search for "Group Email", the other charts around #4.

This does gives people a choice as to how they want to buy the app, and has worked very well for us, (other than the occasional user who downloads both versions and pays twice, who Apple usually refund, or review complaining that the free version doesn't do everything they want.)

The interesting thing is that the revenue from these two versions has been almost exactly equal over the past year, and although 4 or 5 times more users download the free version than Pro, over 20% then upgrade it with the IAP as a single one-off purchase. I know that is a high percentage for IAP- I hear 1-2% is more usual for games, for example- but this is our experience.

We haven't detected a noticeable swing in purchase pattern towards IAP over the past year.

I have made it a point to support software creators on my iPhone from the beginning. Around me a multitude of friends that just cracked their divices and got everything for free. Basically they thought me the fool for not doing this also. At what point will an honest consumer like me be pestered and ripped off time and time again till the tipping point is passed and also just say ah screw it and go ahead and get everything for free since more and more of these apps are crap or just chock full of adverts and or money sucking IAP vampires anyways?

"This is the real reason why Apple doesn’t care about upgrade pricing: there’s no demand from customers"
Since Apple doesn't offer traditional "upgrades" or "trial software" then effectively the way we always bought software probably is "dead" Not because we made a choice, but by the fact that we really were never given one. Not buying an app is a choice of course, but obviously not enough people have exercised that option to make a difference. So in this case "not buying" is really not a choice that has any impact on the model.

Personally I am not a fan of the model. For apps I know, from companies I like, I would probably have no issue buying that app up front. Without being able to trial an app I am not familiar with to see if it works as advertised, I am much less likely to take the leap of faith and buy up front. If I need to go to their site and trial the app, then why not just buy it directly from them?? If we are headed down a path of all IAPs where I am am asked to shell out money to unlock every useful feature I am pretty sure buying from the Mac App Store will no longer be an option for me.

It also seems to me that we are heading down a path where companies (really shareholders) want reliable revenue streams in a timely manner. The traditional upgrade cycle no longer meets that need as innovation can't seem to keep up... So subscription models, and IAPs are being experimented with... People like me are struggling with this change in the marketplace as I want to pay and be done with it.

Personally I never buy or download free apps that have IAP. I dont like apps/games with IAP ,and the same thing i've heard from the most of my friends. I belive that IAP model is a waste of time for devs and waste of time&money for users. Prepay for good and clean apps and delete crap free or IAP apps to keep clean your phone screen and free gb space..

I'm not sure I'd declare something dead based on the opinion of one lone minor app developer but this is an issue we've all discussed the past few years. Besides, his apps are niche. "I’m going to have a hard time justifying an up-front purchase for Overcast — that’s the fastest way to ensure that nobody outside of our upscale-geek world ever uses it." Well yeah , especially if you decide to make a niche product that Apple already does for free. Good luck with this..

I've no problem with the concept that devs should get paid the more you use their app. I know I get paid the more hours I put in for a client. But I make it clear to them how much I charge and spell out everything I am going to do for them in an engagement letter. A lot of these in-app purchase freemium apps make no such distinction. If I see that the app uses virtual currency or has in-app purchase options of 50 dollars or even 99 dollars, I stay the heck away.

Apple can fix things since it is lord and dictator of the app store. It's up to them if they want to allow deceptive devs to rule their store. It's also up to iMore if they want to continue making bold declarations based on the rantings of one who decided to make a niche product (already offered for free by the likes of Apple) that he doesn't think anyone will pay upfront for.

I think your first paragraph nails something. There just isn't a ton of demand for some apps, especially outside as he puts it the "upscale geek world." I mean people i know are trying to pay less for everything cause they make less. They aren't walking around saying, "hey i want to pay more for stuff that I can get free." Which brings me to your point about it being a niche app for a product that apple already makes free. That's the case for most apps in a big picture sense. There is often a perfectly adequate free version that most people will use without ever buying anything in app. Thus the paid app isn't actually worth that much. There's a adequate free alternative by many competitors. And even that author mentions the most used podcast apps are, apple's, then Sticher, and then downcast. And he points out that the first two are free. He didn't point out but i will that that Downcast is also $2 less than the other one he mentioned instacast and it goes on sale once a year and you can get it for $3 less. I use it, It's one of like three apps i've ever bought. It's great. But if you don't need the advanced functions the free apple app works fine. Hell i'd probably have kept using it if i wasn't hardcore with podcasts and hating on the reel to reel look they had for a minute. But point is most people like free, if there's a free alternative they can't be surprised when people gravitate towards that. The solution is make and sell a product that doesn't have a ton of alternative free options. Make an app nobodies done before that's in high demand that apple can't do as well.

It really depends on the developer, what kind of app it is, the quality, what problem he's trying to solve for you, etc. Apple isn't targeting the lowest tier. Why should a developer?

Marco Polo doesn't get it. Every market has a glut of cheap products and companies that sell crap for near free or fill it with ads so that the user experience is crap. And yes, this usually gets the majority of the marketshare. But the goal is profit.

Don't be that. Apple decided they're not that. If you make a good product or app that solves a problem and is high quality, then charge accordingly for it. Support it for bugs but save the updates & new features for the next paid version. Don't work for free. Be known as that premium app developer that believes in a good user experience. Not the tool that falls in line with the clueless majority.

If it's the same amount of money upfront or through in-app purchases, who cares?? Support the apps u like, period. People act like they're saving the manatees or something by having their "I won't support this particular business model!" stances! Smh #FirstWorldProblems